The consumer price indicator rose 4.9% in July from a year earlier, compared with economists’ estimate of 5.2%, Australian Bureau of Statistics data showed Wednesday. The result was the third consecutive slowdown in the pace with the RBA predicting inflation will fall back inside its 2-3% target by late-2025.
Wednesday’s report showed that when excluding volatile items, the easing in annual inflation was a more modest 5.8% in July, compared with 6.1% in June. The data comes after US consumer prices rose modestly, marking the smallest back-to-back gains in more than two years. Australia’s CPI reading follows reports suggesting its economy remains resilient, putting the central bank on track to engineer a soft landing.
The central bank paused this month to assess the impact of its tightening campaign amid a mixed economic picture — consumers have slowed spending as they are forced to allocate a rising proportion of their incomes to repayments while corporate confidence is still holding up.